Agricultural Marketing Reforms RABI CONFERENCE-2005

As a Farmer I must thank all of you for your efforts and concerns But what use if I can not be facilitated to sell my produce at Remunerative Price / Quality linked returns Choose my buyer Place and time convenient to me Escape the fleecing of multiple intermediaries

Increasing Farmers Income 90% of effort is Production oriented Only 10% on Marketing/Post harvest phases Single intervention that can enhance income by 20-30% Private Sector Investment

Domestic Markets Scenario o Regulated Markets. o 7161 of 7310 Wholesale Markets Covered Under Regulation. o Of 27,294 Rural Markets, 15% Under Regulation

Domestic Markets Scenario o Regulated Markets Lack Need Based Infrastructure. o Development Confined to Wholesale Markets. Rural Markets Remain Out of Development Ambit o Current Mandi System Has Multiple Intermediaries and High Value Loss o APMC Regulation Prevents Companies From Directly Sourcing From Farmers

Domestic Markets Scenario o Fragmented Industry, with no Large Organized Players o High Wastage between the Farm and the Retailer

Present Scenario in Value Chain o Producer’s Share in Consumer’s Retail Price Mere 40% to 60% depending on the commodity o Only 25% of Produced Food-grains Utilise Scientific Storage o Less Than 2% of Fruits and Vegetables Production Is Processed o Post-harvest Losses estimate 10% of Food Grain and 25% of Fruits and Vegetables Production

Problems Competitiveness is lost Quality assurance is a ? Loss of Value Export is a problem No Grading/Standardization Consumer Dissatisfaction No Market Intelligence No Price Discovery

Paradigm Shift Present Agriculture is Production Driven Transition to Agri-Business Market Driven What Consumer Wants ? Cutting the value Chain Knowledge led growth Private Investment

Investment Requirement (Rs. in crores) ItemsPhysical (Nos) X PlanXI PlanTotal Wholesale markets Modernization of markets Rural Periodic Markets Grading Centers Modernizing Labs Agribusiness Centres Warehousing (lakhTonne) Total

Source of Investment  Public Investment ??  Significant role of Private Sector How do we get them into the sector Create enabling Policy and Legal framework This requires Reforms

Road Map of Reforms Create enabling Legal and Policy environment Private / Cooperative Markets Direct Marketing and Contract Farming Programs Grading/Standardisation/Quality

Road Map of Reforms Establish Effective Linkages Between Farm Production And Retail Chains Public–Private-Partnership to Promote Professionalism in Existing Markets Stepping-Up of Pledge Financing and Marketing Credit

Road Map of Reforms Introduction of Negotiable Warehouse Receipt System In Storage Projects Link Commodity Exchange with Market Yards for Price and Risk Management Information Technology to Promote Trade/ Market Led Extension Services Facilitate Investments

Leaders In Reforms Kerala, Tamil Nadu Madhya Pradesh Andhra Pradesh Punjab Himachal Pradesh Sikkim Manipur Nagaland Andaman & Nicobar

Followers Many States Enabled some components Require all Components

Scheme For Development / Strengthening Of Agricultural Marketing Infrastructure, Grading And Standardization

Objectives of the Scheme o To Induce Private and Cooperative Sector Investments in Market Infrastructure Development Projects o To Strengthen Existing Agricultural Markets, wholesale and rural periodic, to Enhance Efficiency o To Promote Grading, Standardization and Quality Certification of Agricultural Produce at Farm/ Market Level

Coverage of the Scheme Agriculture/Horticulture Fisheries Meat & Poultry Minor Forest Produce Dairy Medicinal plants Apiculture

Components of the Scheme Functional Infrastructure Market user common facilities Shortening the Value Chain Direct Marketing Contract Farming E-Trading Infrastructure Market extension and market oriented production planning Input Supply

Functional Infrastructure Assembling Combine harvesters Cleaning Assembling yards Collection centers Pre-cooling Chambers Grading Mechanical graders Color sorters Standardisation

Functional Infrastructure Quality Certification Establishing a Quality Lab Accredited Certified agency Infrastructure On-Farm Quality Testing Infrastructure ( Sugarcane Quality Testing for timely harvesting and Maximum Sucrose Content) Grapes Certification

Functional Infrastructure Labeling Bar coding Packaging Pack houses Packing material manufacturing as part of the integrated project Retailing & wholesaling Food world Nilgiris Namdharis in Delhi

Functional Infrastructure Value addition Decortication of Groundnut Waxing of Kinnows Curing of Honey

Market user common facilities o Market yards o Platforms for loading/ assembling and auctioning of the produce etc o Modern auction Systems o Weighing and Mechanical Equipment

Shortening the Value Chain o Infrastructure for Direct marketing from producers to consumers/ processing units/ bulk buyers etc o Infrastructure for supporting Contract farming arrangements between processing/ trading units and farm producers o Infrastructure for E-Trading, market extension and market oriented production planning.

Scope of Infrastructure Projects Infrastructure for supply of production inputs and need based services to farmers AI infrastructure Fertilizer storage units Feed storage units Marketing Intelligence Mobile infrastructure for post-harvest operations Market extension and market oriented production planning

Salient Features of Scheme o Credit Linked Back-ended Subsidy on Capital Investment for  Setting up of General or Commodity Specific Infrastructure for Marketing of Agricultural Commodities; and  Strengthening and Modernization of Existing Agricultural Markets, Wholesale, Rural Periodic or in Tribal Areas

Persons Eligible o Individuals, Farmers, Consumers, NGOs, APMC, Corporations, Cooperatives and Marketing Boards in the Entire Country. o State Projects Assisted by NABARD/NCDC for Modernization of Existing Markets Subject to States allowing  Competitive Markets in Private Sector  Direct Marketing and Contract Farming  Rationalize levy of Market Fee Salient Features of Scheme

Funding Arrangement S.No. Components of Scheme Tenth Plan Provision (Rs. In crores) 1. Capital Investment Subsidy on Infrastructure Project 2. Strengthening of Central Laboratories Awareness/Training, Consultancy and 5.00 Evaluation etc. Total

Involve Women through SHGs

Expectations from Participants Treat marketing as an integral and critical link Awareness creation & Publicity Identify viable projects Capacity Building of all players NIAM, NABCONS can assist in Capacity building, Project Preparation Assistance of Trained Project preparation Experts

Further Details & Assistance

Thank You